Alliance Bank Malaysia Bhd. · MYX:ABMB

Alliance Bank Malaysia Bhd — FY2021 Earnings Presentation

34 slides from Alliance Bank Malaysia Bhd's earnings presentation, May 31, 2021

  1. Slide 1: Analyst Briefing FY2021

    Analyst Briefing 31 May 2021 FY2021 31-May-21 FY2021 ABMB Analyst Briefing

  2. Slide 2: Contents

    Key Results Contents 1 FY21 Achievements  FY21 Strategic Priorities / Achievements  FY21 Financial Highlights 2 FY21 Financial Performance  Revenue & Franchise Development  Managing Risk  Key Results 3 Going Forward 31-May-21 FY2021 ABMB Analyst Briefing 31-May-21 FY2021 ABMB Analyst Briefing 

  3. Slide 3: COVID-19 Management & FY21 Strategic Priorities

    COVID-19 Management & FY21 Strategic Priorities Accelerate Remote Banking FY21 Achievements 1 Covid-19 management Keeping employees safe Accomplishments a) Business continuity: split operations, etc  HQ: ~60% working-from-home (Non-HQ: ~30%) b) Proactive employee communication & staff  Voice of Em

  4. Slide 4: Accelerate remote banking: >80% of accounts opened digitally

    COVID-19 Management & FY21 Strategic Priorities Accelerate Remote Banking FY21 Achievements 2a Accelerate remote banking: >80% of accounts opened digitally Consumer CASA STP Business CASA STP Proportion of accounts opened (%) STP Non-STP Proportion of accounts opened (%) STP Non-STP TAT TAT 11% 11%

  5. Slide 5: Accelerate remote banking: Digital transactions continue growing

    COVID-19 Management & FY21 Strategic Priorities Accelerate Remote Banking FY21 Achievements 2b Accelerate remote banking: Digital transactions continue growing Strong digital adoption: >65% transactions done digitally Account Transactions by Channel Type (Average/Month) Overall transactions +23% 2.6

  6. Slide 6: FY21 Financial Highlights

    Executive FY21 Financial Highlights Summary FY21 Achievements 1 Revenue outgrew industry; 2 3 Managing credit risk: remained top 2 position PPOP grew 15.3% management overlay of for NIM RM313 million RM mil Revenue (RM mil) ABMB NIM RM mil PPOP (RM mil) Cost to income ratio (%) RM mil Management Ove

  7. Slide 7: Contents

    Key Results Contents 1 FY21 Achievements  FY21 Strategic Priorities / Achievements  FY21 Financial Highlights 2 FY21 Financial Performance  Revenue & Franchise Development  Managing Risk  Key Results 3 Going Forward 31-May-21 FY2021 ABMB Analyst Briefing 31-May-21 FY2021 ABMB Analyst Briefing 

  8. Slide 8: Executive Summary: Revenue up 7.6%, PPOP up 15.3%

    Executive Summary Revenue up 7.6% y-o-y, PPOP up 15.3% y-o-y Y-o-Y Change FY20 FY21 Better / (Worse) Income Statement RM mil RM mil RM mil % Net Interest Income 1,323.5 1,360.9 37.4 2.8% Non-Interest Income 365.8 456.7 90.9 24.8% Revenue 1,689.3 1,817.6 128.2 7.6% OPEX 807.0 800.7 6.4 0.8% Pre-Provi

  9. Slide 9: Net interest income grew 2.8% y-o-y

    Revenue & Franchise Development Net interest income grew 2.8% y-o-y a) Despite the OPR cuts, net interest income grew 2.8% Net Interest Income y-o-y mainly driven by lower funding cost from RM mil deposit mix optimisation Y-o-Y impact: RM mil +13.3 +50.3 -89.3 +2.8% 1,360.9 1,323.5 +50.3 1,360.9 +12

  10. Slide 10: NIM at 2.30%

    Revenue & Franchise Development NIM at 2.30% a) NIM remained in top 2 position in the industry: Net Interest Margin Trend  FY21: 29bps better than industry Driven by funding % Industry Average NIM ABMB NIM optimisation 2.43% 2.41% 2.49% 2.37% 2.40% Over past 5 years: 2.30% 2.26% ABMB improved 2.17%

  11. Slide 11: Non-interest income grew 24.8% y-o-y

    Revenue & Franchise Development Non-interest income grew 24.8% y-o-y a) Non-interest income grew 24.8% y-o-y mainly driven Non-interest income by treasury and investment income. RM mil Client based fee income Non-client based fee income b) Client based fee income preserved, thanks to:  brokerage an

  12. Slide 12: Cost to Income Ratio improved to 44.1%

    Revenue & Franchise Development Cost to Income Ratio improved to 44.1% a) FY21 cost to income ratio improved to 44.1%, Operating Expenses  within guidance RM mil OPEX CIR  below industry^: 45.7% 47.8% b) Operating expenses was 0.8% lower than FY20: 44.1% -0.8%  Lower personnel expenses from moder

  13. Slide 13: Net credit cost at 121.4bps

    Managing Risk Net credit cost at 121.4bps (management overlay 71.2bps) a) FY21 net credit cost = 121.4bps (of which 71.2 bps or Net Credit Cost (bps) 59% for management overlay): Net Credit Cost Management Overlay bps +71.2 121.4 121.4 72.1 -5.5 72.1 71.2 -11.6 -1.9 -2.9 50.2 72.1 50.2 FY20 Personal

  14. Slide 14: SME: stable asset quality post moratorium

    Managing Risk SME: stable asset quality post moratorium SME How are we mitigating these risks? GIL (RM mil) Total GIL ratio (%) 30+ dpd (%) Origination 2.6%  Focus on government guaranteed loans 1.9% 1.2% 1.3% 1.2%  Enhanced policy to include income projection using latest bank statements on new b

  15. Slide 15: Corporate & Commercial: asset quality remained stable

    Managing Risk Corporate & Commercial: asset quality remained stable Corporate & Commercial How are we mitigating these risks? GIL (RM mil) GIL% 30+ dpd % Origination 2.0% 2.7% 2.4% 1.7% 1.4%  Tighter credit criteria for customers in high risk segment 1.8% 1.6% 1.3%  Enhanced financing assessment:

  16. Slide 16: Consumer: proactive mitigation actions to contain portfolio

    Managing Risk Consumer: proactive mitigation actions to contain portfolio Personal Financing How are we mitigating these risks? GIL (RM mil) Total GIL ratio (%) 30+ dpd (%) 8.2% PF Origination Mortgage & AOA Origination 6.1% 4.4% 3.6% 5.7%  Jan19: enhanced application duo  Back-testing of current

  17. Slide 17: Core segments growth; highest CASA ratio in industry

    Managing Risk Continued growth in core segments while de-risking corporate book; highest CASA ratio in industry at 47.0% Gross Loans: Customer Based Funding: Core segments growth continued Higher CASA mix CASA Consumer Banking SME Banking Corporate & Commercial Banking Fixed Deposits (FD) RM bil 47.

  18. Slide 18: Liquidity and capital position remained strong

    Managing Risk Liquidity and capital position remained strong Liquidity: LCR, LFR Capital Position % Liquidity Coverage Ratio (LCR) Loan to Fund Ratio (LFR) % CET 1 Tier 1 Total Capital 21.6% 20.3% 212.2% 18.9% 17.2% 15.9% 14.6% Earning 156.7% 156.9% 153.0% 150.0% retention: +1.2% Lower other +1.2% r

  19. Slide 19: Dividend payout at 25%

    Key Results Dividend payout at 25% (above FY20 payout of 22%) a) Dividend: Dividend Paid and Payout Ratio  FY21 interim dividend: 5.79 sen RM mil Total Dividend Paid Dividend Payout Ratio  Dividend payout ratio at 25% Capital conservation 48% 48% 48% due to Covid-19 22% 25% b) Steady net asset per

  20. Slide 20: Contents

    Key Results Contents 1 FY21 Achievements  FY21 Strategic Priorities / Achievements  FY21 Financial Highlights 2 FY21 Financial Performance  Revenue & Franchise Development  Managing Risk  Key Results 3 Going Forward 31-May-21 FY2021 ABMB Analyst Briefing 31-May-21 FY2021 ABMB Analyst Briefing 

  21. Slide 21: FY22 Key Strategic Priorities

    Going Forward FY22 Key Strategic Priorities  Increase SME market share from 4.8% to 5.0% 1  Target to double new-to-bank customers acquisition: >80k SME: Mid to large SMEs Target: Consumer: Affluent market Relationship managers  Sales force expansion to serve mid to large SME channel  Enabling R

  22. Slide 22: FY22 Management Guidance

    Going Forward FY22 Management Guidance Growth Y-o-Y FY21 Actual FY22 Guidance Gross Loans 1.1% 3% – 4% Net Interest Margin 2.30% around 2.35% Cost to Income Ratio 44.1% 45 to 46% 31-May-21 FY2021 ABMB Analyst Briefing Net Credit Cost 121.4 bps < 90bps ROE 5.9% > 7.5% 22

  23. Slide 23: Contents

    Key Results Contents 1 FY21 Achievements  FY21 Strategic Priorities / Achievements  FY21 Financial Highlights 2 FY21 Financial Performance  Revenue & Franchise Development  Managing Risk  Key Results 3 Going Forward 31-May-21 FY2021 ABMB Analyst Briefing 31-May-21 FY2021 ABMB Analyst Briefing 

  24. Slide 24: Key Highlights: Financial Performance

    Key Highlights: Financial Performance 4QFY21 PPOP declined 6.7% y-o-y to RM213.7 mil Net Interest Income & Non Interest Income & Revenue Islamic Net Financing Income NOII Ratio RM mil RM mil RM mil Client Based Non Client Based NOII Ratio 29.3% 474.4 475.7 28.5% 434.4 445.8 421.6 21.6% 22.4% 358.2 1

  25. Slide 25: 4Q FY2021: Q-o-Q Income Statement

    4Q FY2021: Q-o-Q Income Statement Q-o-Q Change  Revenue declined by 6.3% q-o-q: 3QFY21 4QFY21 Better / (Worse) Income Statement  Net interest income: +RM22.1mil or 6.6% RM mil RM mil RM mil % q-o-q. Net Interest Income 253.2 267.3  Non-interest income: -RM52.0mil q-o-q: 22.1 6.6%  Lower client b

  26. Slide 26: 4Q FY2021: Y-o-Y Income Statement

    4Q FY2021: Y-o-Y Income Statement Y-o-Y Change  Revenue declined by 2.6% y-o-y: 4QFY20 4QFY21 Better / (Worse) Income Statement  Net interest income: +RM17.8mil, thanks RM mil RM mil RM mil % to lower funding cost and better deposit mix. Net Interest Income 254.5 267.3  Non-interest income: -RM6.

  27. Slide 27: Key Highlights Y-o-Y: Financial Performance

    Key Highlights Y-o-Y: Financial Performance FY21 PPOP grew 15.3% y-o-y to RM1,016.9 million Net Interest Income & Non Interest Income & Revenue Islamic Net Financing Income NOII Ratio RM mil RM mil RM mil Non Client Based NOII Ratio 1,817.6 1,689.3 25.1% 21.7% 1,360.9 21.6% 1,323.5 19.7% 456.7 365.8

  28. Slide 28: FY2021: Y-o-Y Income Statement

    FY2021: Y-o-Y Income Statement Y-o-Y Change  Revenue grew by 7.6% y-o-y despite OPR FY20 FY21 Better / (Worse) cut and COVID-19 impact: Income Statement RM mil RM mil RM mil %  Net interest income: +RM37.4mil, thanks to lower funding cost and better deposit Net Interest Income 980.8 1,016.7 mix. I

  29. Slide 29: Q-o-Q Summarised Balance Sheet

    Q-o-Q Summarised Balance Sheet Q-o-Q Change  Net loans grew 2.1% q-o-q Dec 20 Mar 21 Balance Sheet RM bil RM bil  SME loans: +3.6% q-o-q RM bil %  Consumer loans: -1.1% q-o-q Total Assets 58.8 60.7 1.9 3.2% (mainly due to higher repayment for mortgage and personal financing) Treasury Assets* 12.7

  30. Slide 30: Y-o-Y Summarised Balance Sheet

    Y-o-Y Summarised Balance Sheet Y-o-Y Change  Net loans grew 0.3% y-o-y Mar 20 Mar 21 Balance Sheet RM bil RM bil  SME loans: +6.4% y-o-y primarily from RM bil % the BNM Special Relief Facility (“SRF”) Total Assets 61.0 60.7 (0.3) (0.4%)  Consumer loans: +0.4% y-o-y mainly from Alliance One Accoun

  31. Slide 31: Key Financial Ratios

    Key Financial Ratios Financial Ratios 4QFY20 3QFY21 4QFY21 FY20 FY21 Return on Equity 7.1% 6.4% 3.3% 7.2% 5.9% Shareholder Earnings per Share 6.6sen 6.5sen 3.2sen 27.4sen 23.2sen Value Net Assets per Share RM3.87 RM4.16 RM4.04 RM3.87 RM4.04 Net Interest Margin 2.43% 2.26% 2.41% 2.37% 2.30% Efficienc

  32. Slide 32: Thank You

    Thank You. Disclaimer: This presentation has been prepared by Alliance Bank Malaysia Berhad (the “Company”) for information purposes only and does not purport to contain all the information that may be required to evaluate the Company or its financial position. No representation or warranty, express

  33. Slide 33: Appendix 1: Financial Assistance

    APPENDIX 1: FINANCIAL ASSISTANCE Targeted Assistance: RM7.0 billion (16% of loan book) About 97% of customers now Payment Relief Assistance (PRA): continuing full / partial repayment RM5.7 billion (82%) Gross loans Continued payment Extended Moratorium (%) Payment Relief Assistance (PRA) Automatic M

  34. Slide 34: Appendix 2: Awards

    APPENDIX 2: AWARDS Alliance Bank won several awards for its digital innovations Best Digital Bank in Malaysia Best Trade Finance Bank in Malaysia Recognition for “BizSmart e-Trade” soluion Also won “Most Innovative Trade Finance Banking Product in Malaysia” Recognition for “Branch-in-a-tablet” solut

Alliance Bank Malaysia Berhad — FY2021 Earnings Presentation on 6ix